Colin Was a Professional Classical Guitar Player Until a Motorcycle

question 73

Multiple Choice

Colin was a professional classical guitar player until a motorcycle accident left him disabled.After long months of therapy,he hired an experienced luthier) and started a small shop to make and sell Spanish guitars.The guitars sell for $700 and the fixed monthly operating costs are as follows: Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales,$0.65 went to cover his fixed costs,and that anything past that point was pure profit.
Colin wishes to earn $4,000 of operating profit each month.Calculate the number of guitars Colin will have to sell to achieve the target profit.

• A)39 guitars
• B)33 guitars
• C)15 guitars
• D)18 guitars

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Definitions:

Push Strategy

is a marketing approach where a product is promoted by pushing it onto consumers, typically through channels like wholesalers and retailers, rather than waiting for customer demand.

Pull Strategy

A strategy in which the goal is to get consumers to pull the product through the marketing channel by demanding it.

Target Audience

A specific group of consumers identified as the intended recipient of an advertisement, product, or campaign, characterized by particular demographics, interests, or purchase behavior.

Product Placement

Inclusion of a product in nontraditional situations, such as in a scene in a movie or television program.